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Warren bill allows lower rates on old student loans

Elizabeth Warren

May 9, 2014 – Sen. Elizabeth Warren, D-Mass., offered a bill this week to allow current holders of private student loan debt to refinance through a government program at the lower interest rate available to students taking out new loans under last year’s Bipartisan Student Loan Certainty Act.

Borrowers with outstanding student loans may have interest rates of 7 percent or higher for undergraduate loans, while the new legislation passed last summer established a rate of 3.86 percent for those loans.

“Exploding student loan debt is crushing young people and dragging down our economy," Warren said. "Allowing students to refinance their loans would put money back in the pockets of people who invested in their education. These students didn't go to the mall and run up charges on a credit card. They worked hard and learned new skills that will benefit this country and help us build a stronger middle class and a stronger America."

Warren’s bill, the “Bank on Students Emergency Loan Refinancing Act,” is cosponsored by Democratic Sens. Barbara Boxer of California, Sherrod Brown of Ohio, Al Franken of Minnesota and Cory Booker of New Jersey.

A statement from Warren’s office said there are almost 40 million Americans with outstanding student loans.